- Apple posted a new March quarter record during its recent earnings call.
- Tim Cook noted a supply constraint expected in quarter 3 of 2021.
- For now, Apple has enough buffer to meet the demands of the second quarter.
Apple posted record earnings for its MacBook and services for the second quarter of 2021 at its recent earnings call. The company also posted an increase of 54 per cent in total revenue, reaching a new March quarter record. On the back of the success, it also warned of an impending supply shortage later this year.
Speaking to analysts during the earnings call, Apple CEO Tim Cook noted an expected supply constraint in quarter 3 of 2021. The company chief mentioned that the shortage would primarily impact the Mac and iPad lineups.
"We expect to be supply-gated, not demand-gated," Cook told analysts during the earnings call, as reported by 9to5mac. Cook highlighted "legacy nodes" as the biggest issue in the shortage, saying that predicting the impact is hard because of multiple players involved.
The shortage will also be felt because of an increased demand for iPad and Mac that Apple has experienced for over a year. The demand surge is accredited to the rise in remote work since the pandemic last year, as well as Apple's transition to its M1 chipsets for the products.
Apple CFO Luca Maestri noted on the conference call that the limited supply could cost the company somewhere between $3 billion to $4 billion in revenue for the fiscal third quarter. Despite the huge revenue cut, Maestri predicted a "strong double digits" year-over-year growth in revenue for the quarter. "We wish we had more inventory of iPad and Mac," Maestri said.
Recent reports unveiled that Apple will soon be bringing the successor to its M1 chips to MacBooks later this year. 9to5mac reports that the company has largely been able to procure the 5nm chip, but the constraints lie with the other components of both MacBooks and iPads.
For iPad, this constraint is said to be with the display, while for MacBooks, the mounting process of components onto circuit boards stands to be the challenge.
Despite the predicted supply constraint, Apple's production of MacBooks and iPads is expected to go smoothly for the second quarter at least. Cook explained that the company has "buffers and offsets" in the supply chain that will get the company through the said period.
How Apple will tackle the challenges to be faced later this year is still to be seen.